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By Rajkamal Rao
Go back to Comparing Life US v. India
The returning Indian family can count on receiving US Social Security benefits, if eligible, even when in India. Given the exchange rate and the relatively lower cost of living in India, this income is not trivial. However, the US government does not offer Medicare benefits in India - something that returning Indian families should be prepared for.
India does not offer generous social security benefits to its citizens. If returning families work here, the only retirement benefit they can count on is the equivalent of the US 401K where you contribute a part of your income in a public Provident Fund account. You get tax benefits for your contributions and unlike in the US, the PF account is backed by the full faith and credit of the Indian government.
Although this matter is not directly related to Social Security and Medicare, one big unknown is the impact of ObamaCare on the returning Indian family. By law, starting 2014, every US Citizen and Resident must show proof of health insurance to the IRS or be liable to pay a penalty. The exact amount of the penalty is dependent upon income but expect it to be about $2,100 per family in the lowest bracket.
Should a US citizen living and working in India show proof of health insurance to the IRS although he is domiciled abroad? Is a person's India health insurance plan adequate? Should the India health insurance plan include coverage for when the US citizen returns to the US for a brief visit?
According to an Oct 2, 2013 story in the Wall Street Journal titled, U.S. Citizens Abroad Avoid Health-Law Mandate, "Americans who live abroad at least 330 days of the year will be treated as if they have qualifying insurance coverage and won’t owe any tax penalty, according to the Internal Revenue Service. That’s true regardless of whether the U.S. citizen actually has health insurance in the country where he or she lives."
This is great news indeed.
Go back to Comparing Life US v. India
The returning Indian family can count on receiving US Social Security benefits, if eligible, even when in India. Given the exchange rate and the relatively lower cost of living in India, this income is not trivial. However, the US government does not offer Medicare benefits in India - something that returning Indian families should be prepared for.
India does not offer generous social security benefits to its citizens. If returning families work here, the only retirement benefit they can count on is the equivalent of the US 401K where you contribute a part of your income in a public Provident Fund account. You get tax benefits for your contributions and unlike in the US, the PF account is backed by the full faith and credit of the Indian government.
Although this matter is not directly related to Social Security and Medicare, one big unknown is the impact of ObamaCare on the returning Indian family. By law, starting 2014, every US Citizen and Resident must show proof of health insurance to the IRS or be liable to pay a penalty. The exact amount of the penalty is dependent upon income but expect it to be about $2,100 per family in the lowest bracket.
Should a US citizen living and working in India show proof of health insurance to the IRS although he is domiciled abroad? Is a person's India health insurance plan adequate? Should the India health insurance plan include coverage for when the US citizen returns to the US for a brief visit?
According to an Oct 2, 2013 story in the Wall Street Journal titled, U.S. Citizens Abroad Avoid Health-Law Mandate, "Americans who live abroad at least 330 days of the year will be treated as if they have qualifying insurance coverage and won’t owe any tax penalty, according to the Internal Revenue Service. That’s true regardless of whether the U.S. citizen actually has health insurance in the country where he or she lives."
This is great news indeed.
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